Economic thoughts, theories and notes from an Economics Professor. Students in my classes can utilize this blog for the class.

Wednesday, December 20, 2006

Flat Panel Discounting

The price war for Flat Panel TV's is hitting high gear, with Circuit City being the hardest hit so far. Read more here

The price war has been a boon for consumers who, in some cases, were able to snap up the sets over the Thanksgiving weekend at below retailers' cost.But growing competition and plummeting prices are taking a heavy toll on many retailers. The consumer-electronics market has turned into a free-for-all as the nation's largest electronics retailer, Best Buy Co., has fended off attacks by giant discounter Wal-Mart, which is looking to electronics to help recharge its growth. Flat-panel TVs this season also have cropped up for sale in such unaccustomed venues as home-improvement outlets, office-supply stores and discount chains.This would be the classic example of a price war among Oligopolists

"Not only did the electronics chain withstand Wal-Mart's initial onslaught, it has continued to gain share. After Wal-Mart publicly crowed about its plan to offer a glitzy Panasonic plasma high-definition TV set for $1,294 the day after Thanksgiving, Best Buy fired back by offering the same TVs for $1,000 and calling it an "unadvertised special.""